On February 3, 2009, the Energy Resources Conservation Board (ERCB) issued a Directive to develop new industry-wide performance criteria for managing oil sands tailings titled Directive 074: Tailings Performance Criteria and Requirements for Oil Sands Mining Schemes (the Directive). The purpose of the Directive is to set new requirements for the regulation of tailings operations associated with mineable oil sands. It is the first component of a larger initiative to regulate tailings management. The Directive specifies performance criteria for the reduction of fluid tailings and the formation of trafficable deposits - solid enough to walk on and ready to be reclaimed - within five years of the end of tailings deposition in a particular area.
Tailings Pond Reclamation
Alberta's inventory of fluid fine tailings requiring long-term containment is now 720 million cubic meters covering an area estimated by various sources at between 60 and 130 square kilometres. Although some test pits have been reclaimed, to date, no tailings pond in Alberta's oil sands has received a Reclamation Certificate from the provincial regulator. The main difficulty faced by producers in reclaiming tailings ponds is the presence of fine particles of clay and silt, a by-product of bitumen extraction, that remain suspended in process water for years or indefinitely. The resultant mixture is a dense layer of clay and silt suspended in the water at or near the bottom of tailings ponds; this mixture is referred to as mature fine tailings (MFT). MFT take many years to travel to the bottom of a pond and may never completely settle out of the process water in which they are suspended, thus leaving a geotechnically unstable layer of MFT that cannot support topsoil for revegetation. The presence of MFT in tailings ponds has made it technologically impracticable for tailings ponds to be reclaimed into trafficable deposits without the use of intervening technology to speed up the settlement of MFT or otherwise separate fine tailings from the process water. Various technologies have been in development for several years now, but remain expensive to deploy on a large scale. With the issuance of Directive 074, the ERCB is regulating tailings management in an effort to press industry to speed up the reclamation process of converting MFT deposits into trafficable land.
Application of the Directive
The Directive applies to all existing, approved and future mineable oil sands operations. Operators will be required to make submissions to the ERCB on how their tailings management systems will satisfy the requirements of the Directive. Operators are also obliged, on an on-going basis, to assess, compare, and report their tailings performance against their approved tailings plans. Any significant changes to the tailings management plan must be approved by the ERCB.
Complying with the Directive
The Directive requires oil sands operators to:
- Reduce fluid tailings by capturing a minimum amount of fines in dedicated disposal areas (DDAs): Fines are defined in the Directive as mineral solids with particle sizes equal to or less than 44 micrometres and DDAs are deposition sites for captured fines. The Directive states that a minimum mass of dry fines in the oil sands feed expressed as a percentage of total fines in the feed must report to (be captured in) the DDAs. This requirement applies to a one-year period between surveys (expected to be July 1 to June 30 of the following year) with the following phase-in sequence:
- 20% from July 1, 2010, to June 30, 2011;
- 30% from July 1, 2011, to June 30, 2012; and
- 50% from July 1, 2012, to June 30, 2013; and annually thereafter.
- Submit DDA Plans to the ERCB for approval: The plan must be provided two years prior to construction of the DDA, though this timing may vary for existing operators. The plan must specify dates for construction, use, closure, capping, and formation of trafficable deposits. DDA plans will be subject to review by the ERCB, Alberta Environment and Alberta Sustainable Resource Development.
- Form and manage DDAs: DDAs must be formed and managed to ensure the formation of trafficable deposits based on the following performance criteria which must be achieved annually:
- Minimum undrained shear strength of 5 kilopascals for the material deposited in the previous year; and
- Removal or remediation of material deposited in the previous year that does not meet the 5 kilopascal requirement.
DDAs must be ready for reclamation within 5 years after active deposition has ceased and the trafficable surface layer must have a minimum undrained shear strength of 10 kilopascals at that time.
- Submit Annual Compliance Reports for DDAs: Baseline surveys for DDAs must be completed for each operation in Summer 2010 and submitted to the ERCB by September 30, 2010. The first Compliance Reports must be submitted by September 30, 2011 and Operators must complete DDA surveys annually thereafter and submit Compliance Reports by September 30th of each year. Compliance Reports must report the status of each DDA including a detailed assessment of the deposit within the DDA based upon specifications listed in an appendix to the Directive. Operators must also demonstrate to the satisfaction of the ERCB that sufficient monitoring, measurement, and sampling are available to measure and report on the status of the DDAs.
- Submit an Annual Tailings Plan and Linkage to Annual Mine Plan: From September 30, 2009, an annual tailings plan will be required as part of the annual mine plan submission to the ERCB. The plan must include annual tailings projections for the following ten years, followed by projections at five-year intervals to the end of the mining scheme in respect of various tailings-related specifications listed in an appendix to the Directive.
- Submit Annual Fluid Tailings Pond Status Reports: Baseline surveys for each fluid tailings pond must be completed in Summer 2010 and submitted to the ERCB by September 30, 2010. The first status report (separate from the baseline survey) must also be submitted by September 30, 2010 and annually thereafter. Fluid Tailings Pond Status Reports include a detailed assessment of materials as well as other requirements listed in an Appendix to the Directive.
Failure to comply with the new requirements could lead to increased inspections or enforcement action undertaken by the ERCB including shutdown orders and delays in approving upgrades or improvements.
Impact on Oil Sands Producers
On February 12, 2009, The Government of Alberta released a 20-year plan for the development of the oil sands, titled Responsible Actions - A Plan for Alberta's Oil Sands (the Plan). The intent of the Plan is to balance various priorities with a focus on the environmental, social and economic consequences of oil sands development. The release of the Plan and the Directive signals to the oil sands industry and the international community that the Alberta Government will move forward with more environmentally respectful oil sands development. The challenge faced by the Alberta Government will be in balancing the promotion of environmentally responsible development with continued growth, increased competitive activity and maximization of long-term value and benefits derived from the oil sands.
Questions abound concerning whether the technology necessary to meet the reductions by the deadlines imposed by the Directive exists and can be implemented cost effectively. Most producers have been proactive on the issue - developing and testing a variety of techniques over the past several decades to solve the problem. Results are promising. The challenge now will be to upscale the technology to handle large volumes of tailings in the timelines set out in the Directive.
Some technologies being actively pursued to reclaim MFT deposits (thus turning them into trafficable land) include composite tailings (CT), which combines fine tailings and sand with gypsum as a binder to increase the density of the material, causing the tailings to settle faster, and thickened tailings (TT), which move tailings through a thickening vessel causing fine tailings to settle out rapidly, producing a dense clay material suitable for use as a feedstock for CT. Other technologies being pursued involve drying the tailings before deposition through a spin-dry cycle, thus eliminating the need for containment dikes.
High oil prices meant that many of the research advances may have been cost effective on a larger scale. However, the recent drop in the price of oil might have the effect of making further research advances too costly for any one company to pursue on its own. The standards set out in the Directive combined with a significantly lower price of oil may necessitate a collective industry-wide effort to manage tailings effectively. Facilitating the collaborative effort are organizations such as CONRAD (Canadian Oil Sands Network for Research and Development) and CANMET (Canada Centre for Mineral and Energy Technology), which consist of a network of companies, universities and government agencies organized with the express purpose of facilitating collaborative research in science and technology to develop cleaner technologies for Alberta's oil sands.
In setting specific performance targets and timelines for reducing fines in tailings, the Directive replaces former guidelines that lacked specificity and enforcement mechanisms. Compliance with the new Directive will challenge the economic and technological capabilities of oil sands operators. While this initiative comes at a time of weak oil prices, innovation has long been the driver of profitability in Alberta's oil sands and those producers that develop the most efficient technology and processes in order to comply with the Directive will have every opportunity to become among the most low-cost operators of the future.
The first step of tailings pond reclamation - readying tailings deposits to be returned to a natural state - has been addressed by this Directive. Future directives might reasonably be expected to stipulate specific reclamation standards for trafficable deposits formed from the DDAs, including standards for topography, soil placement and revegetation.
The oil sands industry requires a degree of predictability in respect of both oil prices and production costs to facilitate the massive capital expenditures required to develop or expand oil sands operations. The Alberta Government must tread carefully to balance the pace of oil sands regulation with its support for a predictable investment climate.